Aside from the usual holiday speculators, the festive season is not traditionally a busy time in real estate; but this year has proven to be an exception. There was genuine high interest and activity throughout December and January, with many properties sold.
During February, this equation changed. While the high numbers of buyers remained, the supply of properties to buy reduced. In fact, what we saw was a growth in the number of people entering the buyers pool, with a corresponding decrease of supply.
What’s driving this growth in demand for properties?
There are a few reasons. Firstly, historically low interest rates are providing a unique opportunity for more people than ever to gain a toehold into the property market. In tandem with this, there is a steady migration into the property investment market as a consequence of the low interest rates. Growth in buyer interest is also being spurred on by the banks becoming marginally more flexible in their lending criteria as the dust settles post banking royal commission, meaning that the process of securing a loan has become a little easier.
Similarly, the decline in supply can be attributed to a couple of factors. One is that, generally speaking, people are not under financial duress and do not have to sell. Another telling factor is the subset of people who want to sell, but with limited current options to purchase, are choosing to wait out this current scenario until they have more choice. And this later thinking process creates a catch22 situation, where because there is less to buy, people don’t sell, and a cycle is created.
This type of market is characterised by quick sales, competitive offers and great prices. Essentially people are eagerly contesting the small pool, and this has the effect of pushing prices up.
In a hot market like this, sales might not just come from an agent’s data base. To achieve the best outcome for the vendor, agents need to be across all aspects of their sales arsenal including digital marketing to provide optimum exposure from multiple buyer pools.
What’s been really positive is that in the last few months, almost all properties destined for auction have either sold prior or on the day. Offers range from the target price to above target, and importantly – sellers are very satisfied with the results.
Another consequence of a reduced supply and high demand market is that buyers are less picky and will look at everything. This scarcity of stock means one thing: It really is a great time to sell!